The general transcription factor, TFIID, consists of the TATA binding protein (TBP) associated with a series of TBP-associated factors (TAFs) that together participate in the assembly of the transcription preinitiation complex. The largest TFIID component, TAF1 has both acetyltransferase (AT) and kinase activities. We demonstrated previously that TAF1 is necessary for the transcription of an MHC class I gene, and that its intrinsic acetyltransferase activity is essential for both in vitro transcription of naked DNA and in vivo transcription. Of particular interest, MHC class I transcription is inhibited, both in vitro and in vivo, by the transactivator, HIV Tat, which we demonstrated binds to the TAF1 AT domain and inhibits its enzymatic activity. Similarly, TAF7, a 55 kD TFIID component, binds to TAF1 and inhibits its AT activity, resulting in repression of MHC class I transcription. Thus, TAF7 is an intrinsic regulator of transcription. These findings led to the prediction that repression of TAF1 AT activity by TAF7 was relieved upon completion of PIC assembly to allow the transition to transcription initiation and elongation. Indeed, TAF7 remains bound to TAF1 and associated with TFIID during the formation of the PIC, but is released from the PIC upon transcription initiation. Further studies were designed to determine the fate of TAF7 after its dissociation from the PIC. We find that TAF7 functionally interacts with both the general transcription factor TFIIH and the elongation factor P-TEFb. Association of TAF7 with TFIIH inhibits its CDK7 kinase with the resultant inhibition of TFIIH-mediated phosphorylation of the Pol II CTD Ser-5; binding of TAF7 to the P-TEFb elongation complex inhibits its phosphorylation of Ser-2 of the Pol II CTD. Furthermore, we find that in addition to its presence in TFIID, the 55 Kd TAF7 exists in a TFIID-independent form that coelutes with complexes in the 230 Kd range on gel filtration. Importantly, we have shown that TAF7 functions in vitro to inhibit transcription at steps after PIC assembly and in vivo co-localizes with P-TEFb and Pol II downstream of the promoter. Thus, in addition to its role in transcription initiation as a TFIID component, TAF7 also functions in the transition from PIC assembly to initiation and elongation. We propose a novel model in which TAF7 regulates the orderly progression of events in transcription, preventing transcription elongation until the steps of transcription initiation are completed and the transcription elongation complex (TEC) is fully assembled. The importance of TAF7 in regulating normal transcription is documented by our finding that cells depleted of TAF7, by siRNA or shRNA technology, proliferate poorly. Consistent with the critical role of TAF7 in cell growth, expression profiling reveals that depletion of TAF7 by siRNA results in reduced expression of a large number of genes. Interestingly, the kinetics and spectrum of genes affected differs between TAF7 and other components of TFIID. This finding supports the conclusion that TAF7 functions at multiple points in transcription initiation, not just in PIC assembly. The role of TAF7 in global gene regulation and development is currently being examined in conditional TAF7 knock-outs.